Let me say at the outset that without electrical supply there can be no oil refining or petrochemical industry.

Now, let’s turn attention to the recent incident at Rabigh Refining and Petrochemical Co (Petro Rabigh) on September 12 when a combined electricity and steam power failure caused the total shutdown of the refinery and petrochemical processing units. Those who are aware of the configuration of such complexes know very well that the failure of any of these systems is risky and the failure of both together riskier.

The failure resulted in not only loss of production but damage to some of the furnaces in the ethane cracker unit, the starting point of the petrochemical chain. Although the refinery restarted a few days after the electricity and steam power were restored, repair and maintenance operations on the damaged furnaces is expected to last 16 days. Petro Rabigh has a capacity for 400,000 barrels a day of crude and 1.2 million tonnes a year of ethane to produce high quality refined petroleum products. It is a joint venture between Saudi Aramco and Japan’s Sumitomo Chemical, each holding 37.5 per cent stake with the remaining owned by the public.

Investment

For the plant, one of the largest complexes in the region, the supply of electricity and other utilities should not be left to an independent power producer, progressive though this concept may be. The independent Rabigh Arabian Water and Electricity Co (Rawec) is the supplier of all utilities to Petro Rabigh, where an investment of $1.3 billion (Dh4.7 billion) has been made for the purpose.

But the energy and utilities system is so integrated with the process requirement that any failure of electricity, steam or both is likely to reflect severely on the whole complex. Petro Rabigh is now demanding from Rawec the cost of repair and loss of profit, estimated at over $66 million.

Because the same kind of incident happened last December and caused the complex to stop for 20 days, Petro Rabigh is serving notice to terminate the agreement and to transfer the ownership of the utility plants to be operated directly by it to insure a higher level of reliability, integration and care.

Eye opener

This should have been the case from the start to ensure such objectives. But sometimes local regulations and investment considerations give priority to the national grid generation when it comes to supplying large industrial plants. In my humble experience when this philosophy is followed, reliability is never insured, though the connection was sometimes made to three different sources.

The national grid is so huge and the number of its users run into millions and therefore blackouts can always be expected. The Petro Rabigh incident is an eye opener for planners where electricity supply “shall be designed economically for continuous and reliable services, safety to personnel and equipment, ease of maintenance and operation, minimum power losses, protection of equipment mechanically, inter-changeability of equipment and addition of the loads”.

An independent supplier may not have the same considerations and we have to remember that nothing scratches your skin like your own nails.

Reliability

The bulk of energy in large refining and petrochemical complexes is provided by the direct burning of fuel for process heating or the raising of steam. Electricity may provide only 10 to 15 per cent of the total energy requirement. However, no one can belittle this modest amount because all the others will not work without it.

The trend now is to concentrate more on reliability; for processing plants, the integration of energy systems and their running by the same management is closer to reliability than relying on outside suppliers. This has been demonstrated time and again where also co-generation of steam and electricity can have ample economic advantages to the running cost of the plant.

It is good to know that there were no casualties in the Petro Rabigh incident. But the financial loss is there for all to see.

The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.